Paramount reaches settlement in lawsuit over $110 billion Warner Bros. Discovery merger

Paramount has reached a settlement with California and 11 other U.S. states that had sued to stop the company's planned $110 billion acquisition of Warner Bros. Discovery, removing a significant obstacle that stood in the way of one of the media industry's largest deals.

Paramount Chairman and CEO David Ellison thanked the state attorneys general, including California's Attorney General Bonta, the Writers Guild of America, and California Governor Newsom for working in good faith toward a resolution. According to Ellison, the settlement includes commitments to produce more than 30 films annually and to expand film production within the United States to support the domestic industry.

Ellison said the goal behind the merger has always been to build a stronger Hollywood, with more stories told, greater consumer choice, and stronger competition. He noted that competition authorities in nearly 70 jurisdictions worldwide had already unanimously approved the deal, agreeing it was pro-competitive, pro-consumer, and pro-worker. With the concerns of the state attorneys general and the WGA now addressed, the company said it has secured complete clearance for the merger.

The settlement was reached just days before a so-called "ticking fee" was due to take effect, which would have required Paramount to pay Warner Bros. Discovery shareholders 25 cents per share for every quarter the deal was delayed past September 30th. That fee would have cost the company roughly $7 million per day.

Although the Trump administration had already approved the $110 billion merger, California, along with Arizona, Colorado, New York, Washington, and other states, filed suit against Paramount and WBD in July over antitrust concerns. The states argued the merger would create a media "behemoth" that would cause substantial harm to the entertainment industry. A judge granted the states' request to pause the merger shortly after the lawsuit was filed.